The big chart is no different from when we recommended getting out right at the top. See alao previous blogs to get a better idea of how it is supposed to go down. Going to the short-term chart, we completed (arguable) a 5-wave first wave down in early October. Since then the stock has been working on tracing out a wave 2 a-b-c, shown here stylized with c=a. We do not need to go that far, just a tick above $27 will do the trick and even that is not necessarily required. Time to get out as wave 3 will decimate this stock
Month: January 2012
WN George Weston Ltd. a.k.a Loblaws and President’s Choice
Ad nauseam? I have included the big chart just to show the range that this stock has gone through over the past 15 years. The move from $10 to $140 was , of course, absolutely normal and the way markets are supposed to work. The next $100 drop was an absolute calamity for which there was no ready explanation, despite the rather obvious fact that the rise was much steeper than the drop. Perhaps it was Wallmart’s entry into Canada.
It regains it’s composure by roughly doubling in what is a fairly clear B-wave. Then even before Europe almost blows up the stock loses 1/2 of its value in next to no time. From that point on it has been working on the longest triangle of them all. For ten months now it has higher lows and lower highs and probable has a few dollars to the upside before completing the required 5 leg sequence. Given its size, this is probable not a 4th wave triangle but a B-wave triangle. Alternatively it is a series of 1-2s masquerading as a triangle. The important thing is to know that “consolidation patterns” are continuation patterns, you keep going in the same direction.
In this case , that is down. We would sell now.
PHM, Pulte Homes update
August 30 we recommended this stock for the simple reason that it had dropped out of a triangle and should return back to that level. As the stock proceeded to drop for most of September you should have gotten it under $5. Here we are, almost back to the triangle , good for a 60% gain. It may go higher but it should drop back to $5.25 before it does that, if it does.